Local Mobile Feature – Foursquare Looks to Monetize with GEO-Targeted Ads
Mashable reports that Foursquare is courting small business in a brand new way, letting large advertisers advertise themselves on a platform meant to let small businesses do exactly the same thing. These listings show each time a customer appears close to a business' location. Small businesses were already able to offer deals and discounts whenever a user checked in to a location, but now Foursquare is enabling them to, for example, attract nearby customers by showing an image and review left by a Foursquare user at this particular location.
What's in it for Foursquare?
Foursquare is a location-based social networking site for mobile devices, such as smartphones. Typically its users “check in” at various venues using a mobile website, text messaging or a device-specific app. Their specific location is available through the GPS in their mobile device. Foursquare has thus far been a means for consumers to promote their favorite bars, hangouts and restaurants. Now, those places will be able to market themselves directly to consumers. While Foursquare has gathered some 25 million registered users, they made just $2 million dollars last year, according to The Wall Street Journal. They're clearly looking for ways to boost the earnings.
How the ads work
The way this works is that the ad platform targets Foursquare users determined by their locations and check-in histories. Merchants will and do have the capability to target nearby consumers with particular tastes – a predilection for fine dining, for instance, or customers who had previously checked-in to their store. Merchants in this program are able to turn off and on their Foursquare promotions anytime, and are charged similar to a pay per click model, that is, they will be charged only on a “per action” basis (when a user actually taps on a promoted listing instead of merely viewing it). So far, Foursquare is charging $0.50 to $3 per action, but that is likely to change when it is released to the masses.
